Southport MP Damien Moore has been accused of making “cynical and legally impossible” demands after claiming Sefton Council avoided paying tax on the Bootle New Strand deal.
Labelling the purchase a “tax avoidance scandal” Mr Moore claimed Sefton did not pay £1.6m in stamp duty on the building which was owned by a Luxembourg company, saying:
“It’s hypocritical of the Labour leadership to criticise others for avoiding tax when Labour controlled Sefton council has done just that.”
The avoidance allegation has been strongly refuted by Sefton Council however and condemned by Southport Labour Party as “factually incorrect and highly misleading.”
The MP’s critics say he has failed to understand that as New Strand was already owned by the foreign company, no stamp duty was actually due when the firm itself was purchased. They stress that far from any suggestion of wrongdoing, Sefton Council bought the Luxembourg company which it is in the process of dissolving and will place New Strand back in British ownership and on the council’s books; thus helping secure its future, regenerate the area and increase taxes to the Treasury.
Sefton Council leader Ian Maher insisted that the tax avoidance claim was without foundation:
“The company which actually owned the Strand was already based in Luxembourg, so we can hardly be blamed for that. We tried to buy just the shopping centre but the owners refused and insisted we had to purchase the company, which meant no stamp duty was due. If no tax is due, how are we supposed to pay tax that HMRC does not even require from us? It is not being avoided and for the MP of Southport to make that claim shows an astonishing level of ignorance.”
The council has stressed that due diligence was carried out on all legal, taxation, financial and retail aspects of the deal and it was being funded by a Treasury loan with the repayments more than met by the finances received from the centre. It also highlighted that the leaders of all the opposition groups were involved in the purchase discussions. Opponents meanwhile concede that nothing illegal has taken place.
Southport Labour Chair Mhairi Doyle, believes there is a deliberate campaign of misinformation being orchestrated locally:
“This is just the latest example. There have been all sorts of wild accusations, the Lib-Dems now claim the Strand cost £45m but they have nothing to base that on and the simple fact is that the loan is more than met by the rents so, in fact, it is creating a credit not a debit on the finances. At a time when their budget has been cut by £200m thanks to the Lib-Dems and Tories, it is valuable revenue. As to Mr Moore, his comments are factually incorrect and highly misleading.”
The MP’s demand that details of the deal be made transparent “immediately” have also been dismissed because there is a legal agreement in place between the seller and the council which prevents commercial details being released.
Political opponents are well aware of this having been part of the purchase discussions and are using it to exploit the council’s position, says Mhairi Doyle:
“Mr Moore’s demands are cynical and legally impossible. John Pugh is little better. They all know Sefton is legally bound not to release certain information so they cry ‘secrecy’ and make mischief. It’s their usual stock in trade of sowing discord and division. Sefton should be praised for coming up with a way to regenerate one of the most deprived parts of the borough, one that’s not costing residents a penny and instead actually making a profit while doing it. It’s a shame the Tories and Lib-Dems can’t be as constructive instead of this constant, deliberate undermining and tearing down.
OTS News on Social Media